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Westminster Hall

Wednesday 20 November 2013

[Dr William McCrea in the Chair]

Pharmacies and the NHS

Motion made, and Question proposed, That the sitting be now adjourned.—(John Penrose.)

9.30 am

Ben Gummer (Ipswich) (Con): Dr McCrea, it is a pleasure to speak under your chairmanship in my first Adjournment debate. It is also a great pleasure to address the assembled hon. Members—this is a good turnout for a 9.30 am sitting on a Wednesday—and especially the Minister, not only because he is an excellent Health Minister, but because he is my constituency neighbour in Ipswich and will recognise the local issues that I shall mention.

This debate came out of a discussion that I first had with Miss Michelle Claridge, a pharmacist in my constituency; I admit that my knowledge of pharmacies and pharmaceutical services was close to zero before that. As with so many incidents in our lives as Members of Parliament, I learned something immediately from talking to a constituent who brought a new experience—a new query—to my attention. She explained something that I had not appreciated. Perhaps you know, Dr McCrea, because you are no doubt a far more experienced MP than I, that a pharmacy’s appearing on a street, especially a new one, is not the work of a simple entrepreneurial decision. It is a minor miracle, and I will explain why.

As the Minister knows, in the centre of Ipswich there is a new development on the waterfront, encompassing several thousand new apartments and a few houses. This new community is demanding new pharmacy services. Michelle Claridge, an entrepreneur, says, “I would like to set up a pharmacy in this area, to service the new community.” But it is not that simple. People cannot just get a retail unit for which they have planning permission and start a pharmacy; it does not work like that. The system is arranged by the Pharmaceutical Services Negotiating Committee. Hon. Members will understand that, from this moment, we will begin speaking as if we were in East Germany. It will be a time warp.

We start with the PSNC. People have to apply to be on the pharmaceutical list, which is now run by the NHS England area team—when Miss Claridge applied, it was run by the primary care trust—which manages it in consultation with the health and wellbeing board for the area and determines whether there is a need for a pharmacy in an area. It draws a circle around the existing pharmacies and says, “Is there a particular need, for this population in this area?”

When Miss Claridge started, the PSNC said that there was not a need because its map did not show the several thousand new apartments and houses on the waterfront area. Even a simple consultation with the Google maps travel distance calculator could have shown that most of its calculations about walking time were defective. The first problem is that the system starts with a group

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of no doubt well meaning and intelligent bureaucrats having to work out whether there is a need for a pharmacy in an area.

Once people decide that they want to set up a pharmacy, they have to apply to NHS England with 21 different forms, the shortest—section 21—being five sides long and the longest being 13 sides long. In total, they have to submit about 200 sides of application forms just to say, “I think there is a need in this area for this new pharmaceutical practice.”

After that, the application can either be accepted or rejected. If it is accepted, people can go ahead and if it is rejected they can appeal, via the local pharmaceutical committee, to which other local pharmacies can also make applications, perhaps saying, “This pharmacy is coming into my patch. It is far too close.” They can make whatever objection they feel is necessary.

The system is already completely regulated from the centre. It is a state-controlled system—contracted out to pharmacists, who are working in it—even at the geographical level, before we get on to buying and selling drugs. I do not intend to offer any radical solutions. I just want to open up the matter as a Member of Parliament. I want to explain my experiences in trying to deal with this system and talk about what I have found out, as a layman with none of the medical expertise of the Minister or hon. Members in this Chamber who are members of all-party groups. I want to explain what I saw as I examined this system.

I turned over a stone and found a lot of interesting bodies lying underneath. There are serious questions about the state’s ability to buy medicines. This is not a small bill. We spend £12 billion a year on drugs, via the NHS—a huge amount. The whole thing, from beginning to end, is run by a state bureaucracy, which, in its scale, complication and anticipation of market forces, would make the North Korean Government proud.

How do we comprehend this extraordinary system and what are the problems in it? First, I have been helped very much today by NHS Southwark clinical commissioning group—in London, I live in Southwark—which posted a useful piece of information through my door yesterday. It contains a nice map showing all the general practitioner practices and mentions lots of interesting things about what it wants to do, all of them worthy. In the middle, under a heading, “Our Vision”, it states:

“Our aim is simple—we want to work with the hospitals, community teams and GPs who provide care locally to make sure that the people of Southwark receive the best care possible and live longer, healthier, happy lives.

We will work to make sure that all Southwark residents receive high-quality, safe and accessible health services and that, over time, we narrow the gap in life expectancy between the richest and poorest people.”

All good stuff, but hon. Members will notice that one significant service provider is omitted: the pharmacist, which does not even bear a mention in this list of different health providers for NHS Southwark.

I understand that this is a common problem throughout the country. Indeed, only 10% of clinical commissioning groups have a contracting relationship for additional services with pharmacies. That is unusual in the European context. As is so often the case in health care provision, this country is somewhat behind our European neighbours.

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Highly qualified people are centred where they can serve local populations, yet in so many cases they cannot offer the kind of medical services that they could offer if they were in France, Germany or the Netherlands, or some more enlightened parts of this country. Pharmacists could offer such services easily and relieve pressure on general practitioners and hospitals. The scale of what they could do is significant. Why can they not offer basic diabetic treatment or flu jabs? One could—I am sure not you, Dr McCrea—go to the pharmacist for emergency contraception, but not for various other treatments that they could offer, depending on the area.

Michelle Claridge has experienced this situation. She said, “I want to set up GP provision in this new community, linked to my pharmacy.” That is sensible, but—oh, no—people cannot just hire a locum in a pharmacy, providing a medical and pharmaceutical service to a new community, because there would be a series of new arrangements and contracts to go through with the NHS area team to allow that to be done. Therein lies another problem. The contracting relationship between the two is so complicated and separate that the area for innovation in what is not really a market at all is limited. That seems to me a great sadness and a missed opportunity, and I am sure the Minister will agree. So how do we loosen things up? I will address that in a second, because we first need to examine how pharmacists sell drugs and purchase them from the various wholesalers who sell the drugs on behalf of pharmaceutical companies.

There are essentially three categories of drugs. First, there are the so-called “special drugs”—not the special drugs that you might be aware of in Northern Ireland or in the rest of the country, Dr McCrea, but special drugs as defined by the NHS. Those drugs are outside the normal regulatory regime. They are called unregulated but, of course, this being the NHS, they are regulated.

Secondly, there are the regulated drugs—the vast majority. They are drugs that are within patent and a few other sectors. Finally, there are the category M drugs, which have come off patent. The NHS tries to derive benefits from their coming off patent by ensuring that there is not excessive profiteering in the sector. I hope I have explained that properly. No doubt I am making a series of solecisms, but I hope Members will excuse me.

David Simpson (Upper Bann) (DUP): I congratulate the hon. Gentleman on obtaining this debate. He mentions special drugs, which are addressed in the research papers that we have received. I am sure he agrees that it is a scandal that the suppliers of those drugs issue invoices of, for example, £600, as it says here, when the actual cost of the drugs is £300. The NHS refunds the £600, and the pharmacy or the supplier pockets the other £300. Multiply that by the billions of pounds out there in the supply chain, and it is a scandal. Something must be done.

Ben Gummer: I could not agree more with the hon. Gentleman. I will address that point.

There are three separate groups that each present different and particular problems. The scandal to which the hon. Gentleman alludes, which was uncovered recently by an excellent piece of journalism in The Daily Telegraph, shows how the NHS, customers and taxpayers have

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been ripped off by the drug companies that are coming in and double invoicing—they are issuing credit notes to pharmacists but invoicing full amounts to the NHS. That situation is outrageous, but it is inevitable when the market is so complicated and lacking in transparency. That is the first of several problems with special drugs.

Category M drugs are incredibly complicated. In the parallel trading of pharmaceuticals across the European Union—just to take one issue—it was often beneficial to import drugs from Greece or southern Europe to the UK because of the price differences between the pound and the euro. The reverse is now true, which means that there is sometimes a shortage of supply in the United Kingdom.

The situation is addressed by a quota system imposed by the pharmaceutical companies, which inevitably causes difficulties for pharmacists because sometimes five people, rather than three, want a particular drug one week. At that point, the pharmacist rings up the wholesaler and says, “I need two more prescriptions.” The wholesaler will then say, “Actually, I don’t have them.” The pharmacist will then have to phone the supplier to ask for two prescriptions, and if the pharmacist cannot get the prescriptions from the supplier, they have to go into the secondary market to buy from another pharmacist who is keeping the prescriptions in stock. The other pharmacist, completely understandably, takes a margin on selling the drug to the pharmacist who requires the prescription.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): My hon. Friend might be aware that I am vice-chairman of the all-party group on pharmacy. The right hon. Member for Rother Valley (Mr Barron) and I considered the issue about 18 months ago, and we produced a report. Unfortunately, the Department of Health does not seem to have taken an awful lot of action and has rather pushed the report into the bottom drawer. Perhaps my hon. Friend might be willing to meet the chairman of the all-party group and me so that we can share our report.

Ben Gummer: My hon. Friend wrote and published his report before the Minister was appointed to his position, so I am sure my hon. Friend is calling on new ears and eyes that are able to consider the problem afresh.

Another problem is that pharmacists are completely at the mercy of the demographic that they happen to serve. The averaging of pricing operated by the PSNC means that if pharmacists happen to be selling a particular pharmaceutical in their area because of a high incidence of diabetes and are making a loss, and if they are not selling many drugs on which they might otherwise make a profit that allowed them to break even or make a small margin, they are immediately disadvantaged—just because of their geography.

If, however, a pharmacist happens to be in another location with a low incidence of diabetes but a high incidence of another condition that requires a high-margin drug, the pharmacist will do very well—not because of business acumen, not because they are running a particularly good service, not because they are friendly to customers, who want to come to see them, but just because of where they happen to be and the health indicators of their particular area. That cannot be right.

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The third problem with the regulated market is that, because of the price changes of particular pharmaceuticals that happen every day and every week, it is impossible for businesses to plan, as they are uncertain of their future margins.

Those are all classic problems of trying to regulate a market. It would be good for the Opposition spokesman, the hon. Member for Copeland (Mr Reed), to take note of what happens when people try to regulate a market to the degree that his party—not him, I am sure; he is one of the more sensible members of his party—wishes to on energy prices. Such regulation results in inflated prices across the spectrum, as has happened in many instances in the drugs market in the United Kingdom. Good customer service is not incentivised, and good pharmacists are crying out to be rewarded for quality. Furthermore, innovation and supply are restricted.

I could go into those problems in far greater detail across the sector. The problems frustrate pharmacists and, no doubt, Ministers, who ultimately have to write the cheque on behalf of the taxpayer.

The third area I will address before I give others an opportunity to contribute is the essential problem at the heart of the debate. Of course it is understandable that we have ended up with a regulated system, because there is only one customer for most drugs. Indeed, if I understand things correctly, 80% of prescription drugs are bought by the NHS on behalf of people who are entitled to free prescriptions. Because of the way in which we have set up our health service in this country, it is impossible to extract the kind of value from the big pharmaceutical companies that other countries are able to extract, as there is only one purchaser. I do not know why in this country we have not got to a position of questioning the business motives and ethics of big pharmaceutical companies, as the United States has for many years.

I should qualify all that by saying that, of course, within the pharmaceutical sector there are the most fantastic companies that are innovating, contributing upwards of £12 billion a year to the UK economy and employing thousands of brilliant people across the country. We should be proud of those companies, but it is surprising that we have such an unquestioning attitude to those enormous interests, which have a relationship with the NHS and general practitioners that could be generously described as corporatist. That is unhealthy in driving innovation, in encouraging responsibility and, most importantly, in ensuring transparency. That is precisely why we get scandals such as the one raised by the hon. Member for Upper Bann (David Simpson). If there is an opaque market, frauds will be committed against the interests of the taxpayer.

I have, I hope, opened up the debate a little so that we can discuss some of the issues. I do not have any prescriptions for how we might deal with them, other than the general principle, which I hope the Opposition will agree with, that liberalisation is generally a good thing. If we deregulate this market—not the quality of the people dispensing pharmaceuticals, but the commercial side of the market—to allow pharmacists to offer more services more innovatively and more cheaply, and if we encourage competition in NHS purchasing and price-setting, we will do something on behalf of taxpayers and patients. I have put forward a group of questions to open up the debate, and I am grateful for the contributions that will follow mine.

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9.50 am

Mr Kevin Barron (Rother Valley) (Lab): I congratulate the hon. Member for Ipswich (Ben Gummer) on applying for and securing the debate at this opportune time. He will know that the change from primary care trusts to clinical commissioning groups means that there is indeed scrutiny in local communities of the worth of local pharmacists and of what they have been doing over many years.

I should put it on record that I chair the all-party group on pharmacy. The group receives financial support from the Company Chemists Association, the National Pharmacy Association, the Pharmaceutical Services Negotiating Committee and the Royal Pharmaceutical Society. The lobbyists Luther Pendragon provide the group with administrative assistance. I have no personal interest in the group, other than chairing it, but I thought I should put those details on record.

Community pharmacy sits at the heart of our communities, and pharmacists are trusted, professional and competent partners in supporting individual, family and community health. An estimated 1.6 million people visit a pharmacy each day, of whom 1.2 million do so for health reasons, making pharmacists the most accessible health care professionals.

I was not really surprised to hear the hon. Gentleman say that pharmacists were not mentioned in the information he got from Southwark. Pharmacists tend to be a little add-on, and we had an example last week, with the publication of the report on A and E, which said that pharmacists might be able to help with some of the issues it raised.

Like GPs, dentists and optometrists, community pharmacies are private organisations contracted to provide NHS services to the public on behalf of NHS England. However, that is not really understood by the public. A 2011 survey by Pharmacy Voice found that 88% of people regarded GP practices as public bodies, when the vast majority are, of course, private businesses. However, only 32% of people regarded pharmacies as public bodies, which is extraordinary, given their impact on our communities.

More than 90% of the average community pharmacist’s turnover comes from the NHS. That is a higher percentage than for GPs in some parts of the country, and even some NHS hospitals do not get that much of their income from the NHS. Pharmacies often provide advice to patients free of charge, with one in seven community pharmacy consultations not resulting in a sale.

The hon. Gentleman said that we do not use pharmacies in the way people do abroad. Many years ago, when my children were quite young, and we were on holiday in places such as Spain or Portugal, the pharmacist was the first health professional people were asked to go to but, sadly, that is not the case in this country. The pharmacist was there with powers to help.

Community pharmacists are the face of the NHS in communities and on the high street, having more engagement with the public than other health care professionals. Some 99% of the population, including even those living in the most deprived areas, can get to a pharmacy by car within 20 minutes, and 96% can get to one by walking or by public transport. Pharmacists can reduce A and E waiting times by dealing with people with common conditions. The hon. Member for Plymouth—

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Oliver Colvile: Plymouth, Sutton and Devonport.

Mr Barron: I am sure Hansard will put that right anyway—I could have said “somewhere in the south”. The hon. Gentleman mentioned the all-party group, and we had a session on pharmacies easing the burden of emergency care. We had several witnesses, one of whom—Paula Wilkinson—was the chief pharmacist at Mid Essex Clinical Commissioning Group. She showed us a publication that the CCG was sending round mid-Essex called “Why wait to see your doctor or nurse? See your pharmacist first!” It is part of the health care on the high street initiative that the CCG is running, and she focused the majority of her comments on that initiative, which she said nudged—that is very much Government-speak—people towards using the pharmacy first. Like another witness, she focused on the expanded role that pharmacies could play in serving patients with minor ailments.

Paula said—this is quite interesting, and I would be interested in the Minister’s comments—that for people on low incomes, prescriptions often provided a way of gaining free access to medicines that are otherwise available over the counter without a prescription. She said that meant that patients on low incomes were perversely incentivised to attend their GP or an A and E service to get prescriptions. She believed consideration should be given to providing some free medicines without prescription to those on low incomes. Clearly, if a patient has been on a medicine for a long time, that would not be that challenging, and a professional such as a pharmacist could extend the period without having to go through any rigmarole and clogging up the rest of the system.

The A and E report that came out last week showed that 40% of people who attend A and E have nothing whatever done to them, which is an extraordinary statistic. Indeed, 50% of people who are blue-lighted—an ambulance or paramedic goes out to them—are not admitted to hospital. We need to look at certain issues in primary care services and, to some extent, in the acute sector if we are to deal with such people.

Community pharmacy provides a common ailments service—we call it a minor ailments service in Rotherham —in 10% of England, and people are encouraged to go to the community pharmacy as part of that. A nationally commissioned service would reduce pressure on GP surgeries and, subsequently, on A and E. Recent reports suggest that 56 million to 57 million visits a year could be managed by pharmacists, freeing up GPs to manage more complex cases, and I agree.

Pharmacists support people with long-term conditions to manage their symptoms, improving access to care for people in the most deprived areas and increasing capacity to treat patients out of hours and in the community. The Minister will be well aware of this, but about 75% of NHS expenditure goes on people with long-term conditions. This winter, quite a lot of them are likely to end up going to A and E and clogging up the system because they have, for whatever reason—they may be forgetful as a result of other problems, such as dementia—not adhered to their drugs regime at home. Managing such people in the community using professionals such as GPs, nurses and pharmacists is a better way of caring for such people. We have few systems to deal with these things, although the hon. Member for Plymouth, Sutton

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and Devonport (Oliver Colvile) will no doubt tell us what is going on in his constituency with healthy living pharmacies, so I will not go into that. These are, however, major issues, and the strengths of pharmacists should be used a bit more.

I mentioned the question of medicines adherence. Under the present general pharmacy contract, it is pharmacists’ duty—and they are paid for this—to take in unused medicines. It is extraordinary that every year medicines costing hundreds of millions of pounds are prescribed and then are unused, for whatever reason. It is a difficult situation. The 2010 report by the York health economics consortium and the school of pharmacy at the university of London suggested that up to £500 million could be generated in England in just five therapeutic areas—asthma, diabetes, raised blood pressure, vascular disease and the care of people with schizophrenia—if medicines were used optimally. Those are all long-term conditions on which taxpayers’ money is spent. The report rightly said that sub-optimal use of medicines and waste undermine the £12 billion investment in medicines by the NHS.

Pharmacists do quite a lot of work which, although it is contracted to the NHS, is not always laid out nationally or used by local health partnerships. The hon. Member for Ipswich pointed out that pharmacists were not included in the publication that he cited. A medicines use review is a review of a patient’s medicines—prescribed and non-prescribed—to promote adherence and to support the optimal use of medicines; 2.8 million MURs were provided by community pharmacies in England in 2012-13. Since 2011, pharmacies have offered a new medicine service to provide additional support to patients who are starting to take certain medicines for long-term conditions. An evaluation of the effectiveness of the NMS is due soon, and more than 640,000 people starting to take new medicines have benefited. That is adherence —making sure that people do as their prescription sets out.

The York and London review, which is entitled “Evaluation of the Scale, Causes and Costs of Waste Medicines”, goes into the question in great depth, and clearly the problem will never be eliminated altogether. Nevertheless it is clear that in this country people sit and write out prescriptions and people take them away and effectively put them on the shelf. The patient might use the medicine for a couple of days. Perhaps they do not like the side-effects, and indeed that is unavoidable on occasion. However, some medicines are stored in bathroom cabinets, and when they are emptied the medicines are taken back to the pharmacist or thrown away, which costs the nation hundreds of millions of pounds. We must question whether some of those medicines, given that they are not used, should be prescribed in the first place. However, that is a wider issue for health professionals, not me.

More than 57 million GP consultations a year involve minor ailments. If we rolled out the scheme that currently covers about 10% of England, we could greatly reduce pressure on those services, and GPs could get on with more important things. The patients could be moved to pharmacies, and more than £812 million of GP capacity could be freed for other things.

In 2009-10, 140,000 people chose their community pharmacy to set a quit date and 62,000 had successfully quit smoking by the fourth week, which was a 13% increase on the previous year. Pharmacists give support

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in a wide variety of public health roles, including flu vaccinations, international normalised ratio-testing clinics—monitoring and adjusting the dose of the blood-thinning medicine warfarin—and asthma clinics.

There has been much debate in Parliament about changes in the Health and Social Care Act 2012. The Minister was on the Committee that considered the measure. Two things were writ large in that Act. First, we have now put into statute the need to reduce health inequalities—but they are not reducing. Everyone is living longer, but in terms of social class things are still going downwards. Pharmacists could work on reducing health inequalities in areas where there is known deprivation. That should be a major aim. Secondly, the Minister will remember the emphasis on population health. In view of the statistics that I have read out, I think pharmacy has a major role to play in improving population health.

Public health problems were very bad 150 years ago, and they involved the environment—bad housing, bad sanitation and bad water. The public health issues that this century will suffer from will be to do with individual lifestyles. I read out some statistics about smoking cessation and pharmacies, and I believe that community pharmacists are the gatekeepers to the national health service. Far more people visit them than any other part of the NHS and they have a major role to play. The sooner we alter the current mode of contact and move away from the situation where pharmacists get the bulk of their money just churning out prescriptions to one where they cover wider issues within communities and look after the health of the population, the better we shall be.

10.5 am

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): It is a pleasure to serve under your chairmanship this morning, Dr McCrea. I congratulate my hon. Friend the Member for Ipswich (Ben Gummer) on securing the debate. I have tried on one or two occasions to get a debate on pharmacy, and he has beaten me to it and introduced the debate very successfully. No doubt he has more pull with the Speaker’s Office than I do. I thank the Minister for attending, too.

I got involved in the pharmacy story when in the 1990s resale price maintenance on non-prescription medicines became a big issue. The chief executive of Asda—I do not think that he was a Member at the time—was very keen to get rid of RPM on non-prescription medicines because he felt the market should be much more open. Quite a debate has taken place over the years on how to liberalise the pharmacy market in a big way.

At that time, community pharmacists were concerned about whether their trade would be reduced and the effect on their livelihoods. We must recognise that community pharmacies play a significant role in the high street economy. People are regularly drawn into town and city centres to spend money and visit the community pharmacy at the same time. I have followed developments with interest. I congratulate and support pharmacists, who do an incredible job. As the right hon. Member for Rother Valley (Mr Barron) pointed out, they are the first point of contact for people who need help.

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I understand the concern of my hon. Friend the Member for Ipswich about the lack of liberalisation in the market and the need for transparency. I am always one for a lot of transparency—more sunlight normally produces it. During the 1980s and 1990s, the Conservative Government made sure that town centre retail developments and new supermarkets were assessed, to find out the implications for other supermarkets and food retailers. Regulation of town centres has been going on for a while. That was also to do with the sequential test.

Steve Baker (Wycombe) (Con): My hon. Friend reminds me that we often complain that our town centres are in decline; he may have given us the reason.

Oliver Colvile: I agree that supermarkets have had an impact, but my point is about trying to protect small businesses in town and city centres.

Steve Baker: That is not quite what I meant. I pointed out that our town centres have been regulated for a long time, and that they are now in decline. Perhaps we should liberalise more consistently, and should have done so for a long time.

Oliver Colvile: The bigger issue, frankly, is car parking in town centres. Outside town centres people do not pay charges for car parking, but they do in town centres: so where do they go? In my constituency, I suspect that they end up at the Marsh Mills Sainsbury’s or elsewhere.

Two other big issues affect the pharmacy profession, one of which is the criminalisation of dispensing errors. If pharmacists make a mistake, they can be prosecuted and potentially sent to prison, whereas GPs, for whom I have a great deal of time, do not suffer the same prospect. The Department of Health is looking at that, and I hope that it will come to a conclusion on how we can equalise the situation and ensure a more level playing field.

The other issue is the sharing of data between pharmacists and GPs. I raised the matter during a recent statement from the Secretary of State for Health on the whole business of how pharmacists could play a part in helping to relieve accident and emergency units. The Government are keen to ensure that more and better data sharing takes place. I have a slight concern in that my understanding is that the process would be run by the Department of Health, but I recently read in an article that the Department was suggesting that the responsibility would lie much more with the local commissioning boards. If the Minister can respond to that confusion, that will be helpful.

We need to ensure that pharmacies play a much better role. They need to be the first point of call for people seeking help from professionals, as that would help to relieve GPs. During the summer recess, I visited the Keyham healthy living pharmacy, which is a brilliant organisation in a deprived community. Life expectancy differs by 11 years between the suburbs of Plymouth and Devonport, which is where the Keyham pharmacy is located. The pharmacy offers not only flu vaccinations, but also smoking cessation services and other such things. It is a service that certainly needs to be available.

Finally, there is concern about how we can improve how people feel about pharmacies to ensure that they are used in a much better way. If pharmacies were used

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to deliver flu vaccinations, that would take some pressure off our accident and emergency units over the winter. We have discussed an important issue this morning, and I am delighted that you, Dr McCrea, have been in the Chair to ensure that we get some positive comments.

10.13 am

Jim Shannon (Strangford) (DUP): I congratulate the hon. Member for Ipswich (Ben Gummer) on bringing this matter for our consideration today. Although I agree with him on many things, his football team, Ipswich Town, is playing my team, Leicester City, on Saturday, so our opinions will differ on that.

David Simpson: You’ll get beat.

Jim Shannon: Well, I hope we won’t.

To return to the matter in hand, having run my own business, I can well understand the pressures on businesses—the need to make profit and to pay the bills at home. I can also understand the principle behind paying for what you get and that a good service needs to be paid for. At the same time, however, from what I have read in the media and the considerable background information to the debate today, the scandal of double-invoicing and cashback to the detriment of the NHS cannot ever be accepted.

I take my hat off to the whistleblowers who have highlighted the practice, which it is claimed has robbed the NHS of up to £120 million. The headlines are clear: “Pricing scandal sees NHS pay £89 for cod-liver oil capsules”; “Firms boast of profits on drugs that cost ‘pennies’”; “‘There’s a lot of flexibility over prices’”; “Pharmacies and suppliers accused of price rigging”, and last, but not least, “The NHS, the drug firms and the price racket”. All those headlines are cause for concern.

I have asked several questions of the Secretary of State regarding the provision of new cancer drugs, Alzheimer’s drugs or any number of other new drugs that are not accessible on the NHS. How do I tell my young constituent suffering from cancer that there is no funding for a drug that has been proven in other countries to help when she is reading about double-invoicing? Is the cost of her life so little for the House that we can allow the practice to continue? I have asked those questions of myself and my constituents ask me them, too.

I was angered when I read about £10,000 monthly kickbacks and other horror stories. It is clear that any agreement needs to stop that from being able to happen. I have the greatest respect for the Minister and I am sure he will hit on such issues in his response. If we need new legislation that enables the NHS to go deeper than merely checking invoices, so be it. It concerns me greatly to think of the number of families who could have received life-changing help this year with the money—our money, our constituents’ money—that has been lost to those who are working the system. That has to stop.

Many heads should hang in shame over how bills have been creatively put together by providers, but I cannot simply allow the Government not to understand that they need to do more.

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Mr Gregory Campbell (East Londonderry) (DUP): Does my hon. Friend agree that one of the most significant recent statements in the press was when a senior executive of one of the large companies said that it would be more than happy to agree to a 70% discount if that is what it took to get the contract? That is a damning indictment of the original price.

Jim Shannon: I thank my hon. Friend for that helpful contribution. The contributions from him, my hon. Friend the Member for Upper Bann (David Simpson) and others may focus the Minister’s attention.

On the availability of medicines, I have read that the National Institute for Health and Care Excellence has approved fewer than one in three medicines since 2005. A recent letter from nine major pharmaceutical companies to The Daily Telegraph started with something that I agree with. I am sure that any Member and, more importantly, any doctor or care worker in the NHS, will also agree with it:

“Medicines should not just be seen as a cost.”

They should first and foremost be about healing and curing illnesses. The letter continues:

“They are an investment and an essential part of improving patient outcomes. Yet…the proportion of medicines refused by NICE is only increasing.”

That is a concern for me, too. Jonathan Emms, UK managing director at Pfizer, has said:

“Right now NICE is saying ‘no’ too often. It is blocking many innovative new medicines from reaching the UK patients who need them most, medicines that are often readily available in Europe.”

Will the Minister say what contact he has had with NICE about not making available in the UK drugs that are available in other parts of Europe?

Although it is hoped that the agreed deal will save the NHS £1 billion over two years, it is essential that that saving goes into making more drugs available for the healing of those who need them and not simply the healing of the deficit. Will the Minister assure me and the House that the savings made will go into the provision in the UK of drugs that have been widely tested and that are widely available in Europe?

Oliver Colvile: Does the hon. Gentleman recognise that drugs and medicines can be dangerous if they get into the wrong hands? Pharmacies also have to face people using the internet to acquire drugs, which is an option that does not carry the same regulation that we expect in the domestic market.

Jim Shannon: I thank the hon. Gentleman for that contribution. It is something that many of us have highlighted and I know that the Minister has spoken about it in the past. The availability of drugs on the internet is an anomaly in the system, and perhaps the Minister can give us an indication of how best to deal with it.

Back in April, we were told that the number of cancer drugs on the approved list was to be halved. Will the Minister commit to ensuring that the savings will be used to increase the amount of drugs that might save lives and give a better quality of life?

I read the story of a mother with terminal cancer, who was forced to fund herself a drug that she believed would give her extra time with her young children, after being refused by a special Government fund. I find such

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stories incredible, hearing about the real heartache and issues that impact on family lives, and yet we—as collective representatives—are unable to help and assist as we should. In America, Obama is trying to bring in a health care system similar to ours. It is referred to as Obamacare—people say that it will make or break him, and it probably will. We, however, seem to be turning ourselves into an American system, whereby we have to fundraise to get treatment. That is certainly not what my constituents or I pay our taxes for, and I am sure that others agree with me.

I want to make a quick comment about Northern Ireland, where our Health Minister abolished prescription charges. That was done on the understanding that cheap generic drugs were not prescribed. Health is a devolved matter in Northern Ireland, and our Minister made a decision, which I support entirely. Will this Minister—I ask this with respect—liaise with the Northern Ireland Minister, Edwin Poots, to ascertain how the scheme is working and how we have been able to stick within our budget in Northern Ireland on prescription drugs?

The right hon. Member for Rother Valley (Mr Barron) made a valuable contribution today. One of the things that he referred to was the drugs that people have and do not use; they sit until they go out of date and are then dumped. In Northern Ireland, the Minister, the GP surgeries and so on have taken steps to ensure that the prescription of drugs is better controlled. Sometimes, people might run out of drugs, rather than having extra in the cupboard, but such steps help and take away wastage in the system. The right hon. Gentleman made that clear in his contribution.

Over the years in Northern Ireland, through the Minister and in co-operation with the pharmacies, we have also tried to reduce the number of people attending accident and emergency. If people have a minor ailment, they should go to their pharmacist or chemist; he or she will be able to give some direction on what needs to be done. There are ways and means of good practice, to which I have referred on many occasions. I say what we do in Northern Ireland with humility, but we actually do some things very well. If such things are done well, they can be a marker for elsewhere.

Time is flying past, but changes clearly need to be made soon. Yes, pharmaceutical companies and pharmacies need to make a profit, but that must be done in the right way; we need legislation in place to ensure that that is done in such a way. Yes, NICE must protect people from drugs that promise all, but deliver nothing, and yet that cannot be used to count pennies and to justify saying no to drugs that will make a difference.

Finally, yes, Government must make savings, but those cannot be taken from the most vulnerable by denying them treatment; any savings should be used for new drugs, to give people a better chance of life, for the sake of our constituents in the whole of the United Kingdom of Great Britain and Northern Ireland. We are not talking simply about numbers on a hospital list—the changes need to be made, and made soon.

10.23 am

Steve Baker (Wycombe) (Con): I congratulate my hon. Friend the Member for Ipswich (Ben Gummer) on provoking a stimulating debate, and one in which I have learned a great deal. In particular, he emphasised the

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local impact that pharmacies can have, while the right hon. Member for Rother Valley (Mr Barron) clearly explained some of the opportunities that can be seized through pharmacies.

In Lane End in my constituency, a pharmacy opened alongside a dispensing GP practice, but if I remember the circumstances correctly, the practice was forbidden from serving local people; we had an absurd situation in which the purpose of the regulation made my constituents’ lives less convenient and less easy, in the interests of somehow distributing profit fairly. The debate has brought in some of the wider aspects for society and some of the things that a heavily regulatory state has messed up.

The purpose of prices, profit and loss in a market society is to guide individuals and voluntary associations into best serving society. If pharmacists wish to open a pharmacy, they should simply be able to do so, if they can find a place to do it, can do so within the law and are selling lawful products. They should be able to get on with it and serve whomever comes through the door. Instead, we have the situation described by my hon. Friend—people have to fill in a 200-page application form and might subsequently find themselves subject to particular restrictions on whom they may or may not supply.

One of the issues with a market system is that business men are profit-maximising, which is both a problem and a benefit. The problem is that business men do not like competition much, because that is what drives down prices and therefore profit. That is the crux of the matter. The purpose of the Government is not to entrench in law and regulation the tendency of business men to seek rent—excess income through capturing the state—but that is just what is happening when competition is inhibited by restrictions placed on a dispensing practice simply because a neighbour has opened a pharmacy. Certainly, on the siting of pharmacies, the Minister should seek to abolish rules and controls wherever he can, because they are getting in the way.

Ben Gummer: In my address, I omitted to mention the whole range of practice payments paid to pharmacists simply for, in effect, being open. The problem is that the opening of a new pharmacy creates a liability for the NHS to pay those practice payments, no matter who does or does not go through its doors. That shows the rather extraordinary situation that we have ended up with in respect of how pharmacies are remunerated.

Steve Baker: My hon. Friend is absolutely right and I am extremely grateful to him for bringing that up. We pretend that we live in a capitalist society—I have said this in the House before—but if our system is capitalism, I am not a capitalist. We have an absurd hybrid system, in which the state constantly intervenes in order to give people rents. It is peculiar that we call it a free market society.

The purpose of our all being here, of course, is to improve our constituents’ lives. When I say such things, my intention is to ensure that my constituents—all our constituents—have better access to pharmacies. In the House, we have a real consensus about an increase in the services offered by pharmacists being of benefit to all our constituents. What I want is for the Government to get out of the way, not to use taxpayers’ money to provide the payments that my hon. Friend mentioned

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and to allow pharmacists to get on and best serve the public in a way that is in the public’s best interests—a way that can be discovered only through experimentation and entrepreneurship.

On pricing, I want to make the point that in this country we are not good at haggling. We should haggle over prices and drive them down. The hon. Member for Strangford (Jim Shannon) talked about the scandal of some simple and inexpensive medicines that ought to cost pennies, but cost very much more. What I see at work there could be something that I witnessed when I was a contractor working with Government: Departments are not good at driving down prices. They tend to accept the price that they are given—“Oh, that must be the market price.” No—they should set the market price by demanding that they are charged less and, if suppliers do not provide the goods at a lower price, they should go elsewhere.

That brings me to generics and parallel imports, a subject touched on earlier. We ought to be making sure that the big pharmaceutical firms do not hold the NHS over a barrel. I have heard some of their arguments, and of course producing a new drug is an expensive business, but we should not be held over a barrel. In a market society, people should be held to account to drive down costs and drive up quality.

Johnson & Johnson, based in my constituency, has a wonderful credo, which was written when the basis of a free society was under threat in an earlier time. That credo sets out the principles on which the industry should be founded, and one such should be: no legal privileges, wherever possible.

Oliver Colvile: During the all-party group inquiry, we looked at that issue. One suggestion for easy identification of who was exporting and importing pharmaceutical products in this country was to look at VAT returns—when I ran a small business and was VAT registered, I had to fill in a piece of paper that recorded what level of EU trade I had ended up doing. I approached the Treasury on the matter, but it was not willing to participate and help, but that seems to me to be a way in which we could identify who the offenders are. We had some difficulty in identifying the offenders.

Steve Baker: My hon. Friend has identified what might be a missed opportunity because an enormous effort is going into preventing that fraud. With the opportunities that electronic communication offers today, it should be possible to use some of that information in other contexts. With that in mind, I will turn to the internet.

Clearly, everyone wants to ensure that prescribing takes place properly, but when people have been prescribed medicines it should be possible for them to buy over the internet in appropriate circumstances. I am particularly aware that homeopaths have had great difficulty with the internet because of the need for people to present physically to buy a medicine.

We cannot have it both ways on homeopathy—either the medicines are relatively harmless and can be treated with scorn by the medical profession, in which case they should be freely available on the internet, or they are

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dangerous and should be tightly regulated. Homeopaths’ experience suggests that people can take responsibility for themselves and buy products on the internet.

Ben Gummer: My hon. Friend touches on an interesting issue. Given the fact that the Government are going to great lengths to try to get GPs to do more consultations on the internet and Skype—great news for many of my constituents, especially those in busy jobs with difficult hours—it seems obvious to extend such innovation to the dispensing of pharmaceuticals.

Steve Baker: My hon. Friend is right. In the 21st century, we should be waking up to the opportunities to use technology to drive down costs and drive up service. People are so busy today, so why can they not have consultations in their offices with Skype, and why can pharmacists not prescribe to offices with Skype? The solution to these problems is for the Government to abolish whatever rules and controls they can and wherever they can, and to liberalise when abolition is not possible.

Mr Barron: The majority of patented goods that the national health service buys are a recognition not just of cost, but of the pharmaceutical industry’s worth to the British economy—including exports, manufacturing base and so on. We export around £7 billion of pharmaceutical goods a year. Might a free market endanger that?

Steve Baker: We may be in danger of straying into philosophically deep water about what free markets do and do not do. Clearly, because of the moral imperatives of health care, we cannot have an unimpeded market. We have made political decisions to ensure that no one goes without health care. That has consequences, and we should accept them.

The way to deploy scarce resources in the service of the public is to allow the price system, as well as profit and loss, to run as freely as possible. When we talk about something’s worth, price is too often ascribed to things that are not subject to market transactions. Only through exchange can it be established how people value things. I do not want to go on for too long, so I will leave that to another debate, perhaps the one on the Budget.

I want to encourage the Government to liberalise and to look more closely at what can be done to enable pharmacists to set up wherever they need to in order to serve the public best.

10.33 am

Mr Jamie Reed (Copeland) (Lab): I thank the hon. Member for Ipswich (Ben Gummer) for bringing this debate to the whole of Parliament today—we often forget that Westminster Hall is Parliament. Issues of the utmost importance have been raised regarding pharmacies and the pharmaceutical industry, and shocking allegations have been made. The House of Commons has a duty to learn the facts and to act accordingly, whether by expanding the role of the pharmaceutical industry and pharmacies or by remedying any wrongdoing in existing price structures.

The hon. Gentleman is right to extol the virtues of community pharmacies for many reasons and I will touch on them in due course. He is right to open up an extremely broad debate, and we have touched on its

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potential breadth. We need to explore the scandal of what

The Daily Telegraph

called the drug price racket. I can understand a patient missing an appointment which regrettably wastes the time of clinicians and costs the NHS money. I can understand the worried well occupying GPs’ time when they have no real need to do so. I can understand patients not taking a full course of antibiotics or keeping the medicine cabinet at home filled with prescribed drugs for which they have no real need. All those behaviours cost the NHS money, but individuals will not be aware of the costs they are incurring for the NHS, nor do they intend to divert scarce resources. There is no deliberate disregard for the NHS, for other patients, or for the taxpayer in these instances, but clearly more work needs to be done to reduce these costs.

Let us consider one of the central allegations before us today—the drug price racket. Some private interests—pharmaceutical companies and pharmacies—are knowingly and deliberately committing fraud. We live in a world that is very different from the pre-crisis world that existed before the global economic crash. We live in an era that is set to be defined by austerity, and public finances are still in a parlous state. In society at large, not just in Parliament and across the political spectrum, but at the school gate, in the high street, and in the boardroom, it is understood that public money is valuable and scarce, and that it should be spent wisely and prudently.

Drug price fraud is happening in our most valued public service at a time of economic crisis, and it has occurred by design and not accident. Those responsible are not simply undertaking a grotesque financial deceit of patients and taxpayers, but are probably depriving the NHS of resources that could and should be used for patient care. To take the point to its logical conclusion, these parties have fraudulently diverted from the NHS resources that could have saved lives.

A few years ago, the Prime Minister referred to lobbying as

“the next big scandal waiting to happen”.

We now know that he was wrong. Shamefully, in recent months and again today, we may have unearthed the next big scandal that the Prime Minister warned of. My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), the shadow Attorney-General, wrote to the Serious Fraud Office about the drug price racket in July:

“You will be aware that the Telegraph has brought to light extremely serious allegations that pharmaceutical companies in collusion with chemists have been rigging the market in prescription drugs that are generally not covered by NHS price regulations…If the allegations are substantiated it will mean that the NHS has been systematically overcharged hundreds of millions of pounds. This would represent a colossal fraud on the taxpayer. An offence of that magnitude would surely warrant the attention of the Serious Fraud Office and not just an internal inquiry of the counter-fraud department of the NHS. I would be grateful if you could let me know what steps, if any, the SFO intends to take on what appears to be prima facie evidence of conspiracy to defraud.”

David Green, CB QC, of the Serious Fraud Office responded on July 19 and concluded:

“The SFO are working closely with NHS Protect and the allegations that have been made are the subject of careful consideration. If, having considered the available information, evidence of fraud is identified, further consideration will be given as to which agency is the most appropriate to investigate these matters.”

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My hon. Friend has received no other communications from the Serious Fraud Office in the intervening period, and I have today written to Mr Green asking what progress the SFO has made with its considerations. I have also written to the Chairs of the Select Committee on Health and of the Public Accounts Committee to alert them to these issues with a view to their undertaking their own inquiries.

The Daily Telegraph should be congratulated on its investigative journalism. There is absolute consent on that. It has provided a great service to the public and the NHS. We should be cognisant of the awful parallel that it rightly exposed: the parliamentary expenses scandal. That was another truly remarkable service entirely within the public interest. It is an apt comparison. The abuse of public money represented by the parliamentary expenses scandal resulted in the jailing of Members of Parliament and of peers. Shocking as that was to the public and seismic as it was to the political establishment, the fraud and false accounting pales into insignificance in monetary terms compared with the sheer scale of the embezzlement that is now being alleged in the drug price racket.

I repeat that this is not just a get-rich-quick caper, but the knowing and deliberate abuse of public money that should have been used to save lives. That is the scale of the allegations. We need the pharmaceutical industry, and we need pharmacies and pharmacists. We need the pharmaceutical industry to help to deliver our national life sciences strategy. We need it to help to underpin academia so that we can continue to break new ground in medicine research and to develop new treatments, new drugs and new medicines. We need to recognise and reward the public good that that represents.

We need to expand the role of community pharmacies if we are better to deliver a more integrated, efficient and effective health care system. We need to make better use of the 1.6 million interactions that will take place today between the population in England alone and pharmacies. The average person visits the pharmacist 14 times a year—more than once a month—and we need to capture better and utilise those interactions for improved individual and public health. Of that, there is absolutely no doubt.

However, for us to do any of that, we need to be able to trust the motives and actions of all the groups involved. Let me say to the pharmacists and pharmaceutical companies that are doing no wrong—clearly, that is the overwhelming majority—that I regret the distress that this issue will inevitably cause them, but it is essential for all of us involved with the sector to leave no stone unturned in establishing the facts, if we are to be able to maintain the faith and trust of the public. I know that the Minister, for whom I have genuine respect, will be as appalled by the revelations as anybody else, and I hope that he will be able to answer the questions that I put to him today. If not, I would appreciate a written reply.

The Daily Telegraph describes the Government announcement of drug-pricing caps in 2011 as “a ‘hallelujah’ moment” that has led to significant fraud. Does the Minister consider that that is the case, and will he investigate why it is that those disposed to committing fraud are using the announcement as the basis on which they are able to defraud the NHS? On 20 July, the Secretary of State for Health told The Daily Telegraph that he had ordered an investigation into the allegations. Will the Minister tell us where those investigations are

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up to? What has been investigated? What is the scope of the investigation? When will the investigation be completed? The Minister will note that Serco has been made to repay £24 million to the Treasury for financial wrongdoing in the course of delivering public services. Will the Minister support repayments to the NHS if price fraud allegations are proven?

Finally, we all want to develop the role of community pharmacies. We all want to help our pharmaceutical industry to thrive and innovate, and we all have a duty to spend public money effectively, properly and honestly. I look forward to the Minister’s reply.

10.41 am

The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter): We have had a wide-ranging debate today on issues such as the deregulation and regulation of pharmacies, the local provision of pharmaceutical services and the extension of the role of pharmacists and what they do in our communities. Importantly, we have also discussed pricing and behaviour that, if not fraudulent, is certainly very irregular on behalf of some pharmacists and drugs companies. I hope that I will have time to deal with all those issues, but I will write in more detail to any Member here today who feels that more points need to be answered.

Before I go any further, may I say that it is a pleasure, as always, to serve under your chairmanship, Dr McCrea? We took part in many sittings together when the Health and Social Care Act 2012 was considered in Committee, and it is always a pleasure to serve under your chairmanship. I congratulate my hon. Friend the Member for Ipswich (Ben Gummer), my constituency neighbour, on securing today’s debate. It is important to recognise that our NHS is not only about doctors and nurses, but about midwives, physiotherapists, occupational therapists, heath care assistants and all the other people who contribute to the health of the nation every day, including pharmacists, who play an increasingly important role in delivering high-quality local health care and who are embracing the enhanced role that they have been offered under the 2012 Act. It is right that we put on record our thanks for the work that pharmacists do every day.

The right hon. Member for Rother Valley (Mr Barron), in an excellent, considered speech, made some very good points. In particular, he said that community pharmacists are the face of our NHS in many communities. He is absolutely right in saying that because, particularly in more deprived areas of the country, pharmacists are often the first point of call for advice—whether on simple details about medications or for important primary health care advice. Pharmacists perform that role every day. We should be grateful to them for what they do, and I put on record my thanks for that work.

It is important to put on record that pharmacies are in robust health. Although we debate deregulation and difficulties, we know that there are more NHS community pharmacies than ever before—more than 11,400 in England—and they are offering health care, treatment and healthy lifestyle advice and support throughout the country. They dispensed more than 900 million prescription items last year, which is up 53% from 10 years ago, and about 2 million prescriptions are handed out every day

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by pharmacists. Therefore, we have an industry, as part of our NHS and in its commercial activities and other work, that is in robust health and is performing a valuable service for our NHS.

Of course, we could get into the issues that the right hon. Gentleman rightly raised on the appropriateness of prescribing medication. The chief medical officer talked in some detail in a report about the need for GPs to look sometimes at the appropriateness of the antibiotics that they prescribe and about how we need to look at antimicrobial resistance in this country. The right hon. Gentleman made his points very well, but I hope that he will forgive the fact that I shall not address them directly in today’s remarks. However, he was right to make them and the chief medical officer certainly agrees with him, as do I.

I shall deal with other points that have been made, but initially, I would like to address the important points made by my hon. Friend the Member for Ipswich. We rightly value the innovation and the opportunities that pharmacists have to innovate and support their local communities in different ways. Because they are centred in the community, only pharmacists are able to use such methods. I had the pleasure of attending the annual pharmacy awards and looking at some of those ways. I saw pharmacies, embedded in local communities, making a real difference in providing health and lifestyle advice and improving the quality of care available to local patients.

At the same time, although we want to encourage and support innovation—the pharmaceutical price regulation scheme, or the PPRS, was recently renegotiated and enhanced to give pharmacists the opportunity to innovate exactly as I have described—we also need to recognise that we have a publicly funded national health service, which is a point that has been made across the Chamber today, and we are very proud of it. It is free at the point of need, and it is important to ensure that the money that is given to the health service, whether to pharmacies or to other parts of the NHS, is properly spent, and there is also a role in ensuring that services are provided in a safe and effective way. I shall come on to some of those points later.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) has been a consistently strong advocate for the role of pharmacists, and he made his points very well today. The hon. Member for Strangford (Jim Shannon) also made a useful and powerful contribution, which was picked up by the hon. Member for Copeland (Mr Reed) a few moments ago, about the importance of ensuring that there is no fraud in the system and that pharmacists always behave appropriately. I am sure that the majority of the time pharmacists behave appropriately and make a very valuable contribution. When there may be fraudulent behaviour, it is right to pick up on that and investigate it. I will come back to that in a moment, because we all want to see high value for money from our NHS and to make sure that the money is spent on patients and not wasted. I think that that is something that we all agree with and believe in across the House.

I turn to the important issue of pricing. The vast majority of drugs that are prescribed are either covered by the PPRS or are generics, where competition helps to keep the price down. We recently introduced a price for common specialists, but a small number of prescriptions,

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as has been mentioned in the debate, fall outside the pricing mechanisms that are in place. We are working with the Pharmaceutical Services Negotiating Committee to find a better mechanism to encourage pharmacists to seek lower prices.

Where there may be cases of fraud, it is right that we investigate them, and they are investigated. NHS Protect exists to safeguard—to protect—against fraud in the NHS. That has been a consistent policy; it was followed by the previous Government, and it has been followed by the current Government. The reason why we need services such as NHS Protect is to ensure that if there is fraudulent practice—in this case, potentially in the behaviour of a small number of pharmacists in dealing with small, unique areas of pricing—it is investigated properly. I will ensure that either I or Earl Howe, who is the Minister responsible, writes to the hon. Member for Copeland to inform him of where we have got to with the investigation.

The other point, which was made by the hon. Member for Strangford and is very important, is that we want to ensure that money goes on patients. There is increasing demand for drugs. It is very good that the NHS is continually innovating and developing more treatments, better surgical techniques and improved drugs and mechanisms. Of course, when drugs are used in the NHS, they need to be evidence-based, but I hope that he will agree that it is good that we have set up the cancer drugs fund, which has helped to increase the speed at which people with cancer receive drugs. More than 30,000 people have benefited from the cancer drugs fund and received cancer drugs. We should all be pleased about that and proud of it.

Jim Shannon: I thank the Minister for that positive response. I outlined in my contribution a couple of examples of people who did not access the cancer drugs fund, but in my mind clearly should have qualified. Is he prepared to look at that issue to satisfy those people who need drugs urgently because of the time they have left on this earth?

Dr Poulter: On how drugs are accessed, one of the problems—this was why the cancer drugs fund was set up—was that some people, as the hon. Gentleman rightly outlined, had been receiving drugs in other countries for many years, but we in this country were a little slower to respond to some of those innovations. But of course we need to ensure that, whatever fund we set up for providing medications, those medications are shown to be effective and there is an evidence base for them. However we do things, there will always be new treatments on the horizon that we would like to get through to people more quickly, and we need to ensure that those treatments are always evidence-based. I think that we can be pleased that the cancer drugs fund has made a significant difference by providing treatments in a more effective and much quicker manner, but if the hon. Gentleman would like to discus the matter further, I would be very happy to see him and talk it through in more detail.

I think that it would be useful for me, picking up on the points raised early in the debate, to outline the processes involved in opening a pharmacy. Anyone can open a pharmacy anywhere, subject to the premises being registered with the General Pharmaceutical Council,

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when the owner’s service model includes the sale or supply of pharmacy medicines or prescription-only medicines against prescriptions from that pharmacy. However, there are extra criteria for providing NHS pharmaceutical services. Anyone wanting to provide NHS pharmaceutical services is required to apply to the NHS to be included on a pharmaceutical list.

Before September 2012, there were control of entry requirements. The NHS (Pharmaceutical Services) Regulations 2005 determined whether a pharmaceutical contractor could provide NHS pharmaceutical services. In England, no new contractor could be entered on to a PCT pharmaceutical list unless it was “necessary or expedient” to secure the adequate provision of pharmaceutical services locally. That was the control of entry test. If a new service provider was judged neither necessary nor expedient, the NHS, or the PCT in question, had to refuse the application. There were rights of appeal to the family health services appeal unit, which is run by the NHS Litigation Authority. That was available if there was a concern.

Part of the reason for the strict criteria relates to the pricing mechanism and how pharmacists are paid, which I will come to later. Obviously, the local health economy is an issue, and pharmacists are not paid just for the number of prescriptions that they provide; they are also given a baseline fee. When we have a publicly funded health service and we need to ensure that need and demand are aligned, it is important that we look at this in the round. I sympathise very strongly with the points about the need to de-bureaucratise the NHS where possible—those were good points well made—but we also have to recognise that this is not just about arbitrary mapping; it is about aligning need and demand for a service within the pricing framework in place. That is not just about the number of prescriptions that are provided; it is a much more complex mechanism. I will come to those points later.

Mr Jamie Reed: I am grateful to the Minister for giving way; he is being typically generous. On pharmacy numbers, does he think that we have too few or too many, or is the number about right?

Dr Poulter: The hon. Gentleman will be aware that under the previous Government, the Office of Fair Trading did a review and recommended total deregulation of the pharmacy industry. That was in 2003. The previous Government put in place a strong package of reforms to recognise that we need some degree of what my hon. Friend the Member for Ipswich would call market forces but I would probably refer to more as patient choice. We need to support patient choice as much as we can, but within the context in which we have a publicly funded service that needs to be regulated. It is a health care service; it is treating and looking after patients. We need not only to secure good value for the taxpayer, as part of how we fund that service, but to ensure that there is independent regulation and some regulation by Government as well. That is about ensuring that we have the highest-quality services available.

Given that I am running short of time, I will write to my hon. Friend or I would be happy to meet him—whichever he prefers—to talk through the specifics of the context of mapping out a local needs assessment, which is now carried out by health and wellbeing boards.

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That is a pharmaceutical needs assessment. I am happy to talk through with him in detail how that interrelates with the pricing mechanism and how we need to ensure that the two are kept in balance in the context of the conversation that the hon. Member for Copeland and I have just had.

It is worth highlighting the fact that pharmacists and pharmacies play an increasingly important role in our NHS. Many pharmacies now provide additional services. They are contracted to do so outside those pricing frameworks. That is done locally by clinical commissioning groups. Health and wellbeing boards or local authorities can also contract pharmacists to provide services. As my hon. Friend will be aware, responsibility for public health—40% of that budget—has now passed to local authorities. Given that public health responsibility, there is a strong role for local authorities in commissioning local health care services if they feel that that would be in the interests of the local population.

Under the Health and Social Care Act 2012, other providers of health care services, outside the traditional framework of GP and community services and secondary care, were given more of an opportunity to put themselves forward and offer to provide valuable services. This is a real opportunity for pharmacists to bring forward to CCGs what they do and to make the case that they can provide many services in a way that will be focused on primary prevention and that will save the local health economy money but also deliver better care. The track record of pharmacies and pharmacists is very good in delivering community care—whether looking after people with diabetes or providing simple services for other patient groups. Under the 2012 Act, there is now a much greater opportunity for pharmacists to come forward and put in offers, within an integrated health service, and make the case about how they can provide services. They may be able to do that in a much better way, as they are often embedded in their communities, than some of the traditional mechanisms in the NHS.

I hope that my hon. Friend will be reassured by the fact that the legislation that we have put in place as a Government has given pharmacists a much greater opportunity to contribute to their local health economy, not just in economic terms and in terms of the economic benefits that that will bring for pharmacists, but by delivering the very good care that we know they can deliver.

We have had a wide-ranging debate. I think that we can be sure that there is in place a robust pricing mechanism, which on the whole works very well and secures good value for the taxpayer and for local patients, but there are issues about certain items that pharmacists can prescribe, and we do need to look into them. There is a role for NHS Protect in doing that. We value the innovation that pharmacists provide locally in delivering better—higher-quality—patient-centred care, and the 2012 Act has put us in a better place to support local pharmacists in delivering the kind of patient care that we all want to see in our local communities.

Dr William McCrea (in the Chair): I thank Members for the courteous manner in which they conducted the debate.

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Internet Governance

11 am

Alun Cairns (Vale of Glamorgan) (Con): It is a pleasure to serve under your chairmanship, Dr McCrea—I think for the first time. A number of colleagues have remarked that this is a peculiar subject for debate and have asked me to clarify the debate’s purpose. I should make it clear that that group does not include the Minister, who has positioned himself as a driving influence on internet governance. He has attended the past three meetings of the Internet Governance Forum—an organisation that I will come to later in my remarks—where his contributions have been valued greatly, so demonstrating that the UK is a leading contributor to the development and evolution of the internet. Nevertheless, it is worth explaining why I have chosen this subject for debate and why it is so important to us all.

The internet is a tool that crosses all spheres of life. It is hard to believe that it is only 30 years old, and even younger to the mass population. At the outset, it was a network used by academics to connect research and academic institutions; now it is central to all personal and commercial activities in our lives. It allows better communication, permits transactions and can help to generate wealth and support freedom. It has been central to the overturning of Governments in the interests of democracy around the world, but has, sadly, facilitated the spread of terrorism at the same time. We must always be aware that it can be used for malevolent purposes.

The governance of such an instrument is obviously relevant to us all and any changes to that are a matter for us all to comment on. Child protection online has dominated the political agenda of late in the United Kingdom and is an obvious example of why internet governance is important and relevant to individuals, families and organisations. It is not a techie thing: its implications are far reaching. Trust and identity, security and cyber-security are just a few issues that show why Governments and individuals need to be equally interested in internet governance.

The internet’s roots in academia mean that its governance structure has simply evolved, and that evolution has generally taken place in the absence of Government interference, probably because it took Governments some time to understand the internet’s potential. If Governments had been more involved, the internet would have taken much longer to develop and would be less free, less innovative and less revolutionary—in every sense of the word. The freedom of the internet has led to its innovation. If Governments had been in control, we would not be where we are today and the world would, without question, be a different place.

In effect, the internet has developed according to what has been labelled a multi-stakeholder agenda: the private sector, civil society, academic groups, technical communities and the voluntary sector have all played their part, as well as Governments, with all stakeholders contributing on an equal footing. That situation gave rise to the Internet Governance Forum—an annual conference that stemmed from the United Nations world summit on the information society in 2005. Its purpose is to bring together a wide range of individuals and organisations to discuss internet governance issues. It

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recognises the need for partnership, consensus building and innovation to respond to improvements in technology, together with the new opportunities and challenges that those changes and improvements bring.

The Internet Governance Forum, or IGF, offers a neutral space. Although it does not result in a negotiated outcome, the organisations that it gathers together develop thinking that is implemented by the international multi-stakeholder community. The IGF provides an excellent framework for understanding internet issues, where difficult balances often need to be maintained. The UK has been at the forefront of parliamentary engagement with the issue, and MPs from around the world have played an active role in shaping discussions over the years. I would encourage continued participation.

I have had the privilege of attending two meetings of the Internet Governance Forum and draw Members’ attention to the relevant entry in the Register of Members’ Financial Interests. Nominet, the internet registry company that manages the .uk domain space, has sponsored MPs from all parties to attend over the past seven years, recognising the forum’s importance.

I pay tribute to Nominet’s role in the organisation itself. It plays a full part in developing thinking about internet governance and ensures that the UK’s interests are heard at the centre of the decision-making process. It is also worth noting that the United Kingdom Internet Governance Forum, or UK-IGF—the organisation that develops thinking on internet governance here in the UK—would not happen without Nominet’s support, so Nominet plays a much bigger part than simply managing the .uk domain registry.

The UK-IGF also takes a neutral position, allowing and encouraging all attendees to contribute freely and to develop independent thinking. I had the privilege of chairing this year’s meeting of the UK-IGF, which, among other issues, highlighted child protection, youth engagement and identity and trust. That event was central to the contributions made by UK representatives at the IGF. Attending the past two IGF meetings has given me an opportunity better to understand international influences and cultures and how they form part of the internet governance process.

For me, this year’s IGF was markedly different to the meeting a year earlier. Among the range of subjects under discussion, which included trust and identity, cyber-security, human rights and protection of children online, the structure and governance of the internet itself was dominant. That is why I wanted to secure today’s debate, to ensure that the issues that were considered there are on the record here in Parliament.

When I say, “The structure and governance of the internet,” I am referring to the calls by some Governments and some nations to have a greater say in how the internet is governed—perhaps, according to their agenda, I should say managed. Before I explain the risks that entails, it is worth commenting on the governance structure of the internet as it stands. The Internet Corporation for Assigned Names and Numbers, or ICANN, co-ordinates the Internet Assigned Numbers Authority, or IANA. IANA is the department of ICANN responsible for co-ordinating some of the key elements that keep the internet running smoothly. It allocates and maintains unique codes and numbering systems that are used in the technical standards that drive the internet and enable it to work. Although the internet is renowned for being

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a worldwide network that is free from central co-ordination, there is a technical need for some key parts of the internet to be globally co-ordinated; that co-ordination role is undertaken by IANA. ICANN performs the IANA functions under a US Government contract—a fact that is particularly relevant.

It is that relationship with the US Government that some organisations and nations are concerned about and are seeking to change. The fallout from the Edward Snowden revelations was a genuine concern to some at the IGF, but it is being used by others as an opportunity to gain stronger control of the internet. Some Governments are calling for changes to the way in which the internet is governed, potentially risking the freedoms that it has brought about, and using information shared by Edward Snowden as the reason—or should I say as the excuse?—to do so.

I believe that the internet must remain open with oversight that derives from the joint action of international organisations, industry and civil society, but I am concerned that other nations are calling for control that could limit the internet’s contents and, as a result, its potential for innovation, ingenuity and investment. Next April, the Brazilian Government are hosting a summit to consider the issue. It is not yet clear what the exact purpose of that summit is, but it is clear that some nations see it as a key step to increasing their power and influence, and that of Governments in general, over the internet.

If those Governments are successful, that will raise serious issues for us all. The great freedoms that have come from the internet as we know it may well be under threat. To give credit to the Minister and to the Foreign Office, the UK Government have already played a leading role in promoting internet freedoms. I refer to the positive response that I received from the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson) to a written parliamentary question:

“At the heart of the Government’s vision for the future of cyberspace is an open, borderless internet that benefits from collective oversight between Governments, international organisations, industry and civil society.”—[Official Report, 11 November 2013; Vol. 570, c. 447W.]

That is exactly what I want to support and underline. It is critical that no single body controls all the functions that govern the internet. That was set out by the UK Government in 2011, when the Foreign Secretary launched what has become known as the London process of international conferences on cyberspace.

It was good to see that the Government underscored their position again in South Korea earlier this year. The Government, working with other stakeholders including Nominet, Internet Society England, BT and Global Partners Digital, have an excellent track record in shaping the discussions, and I am sure that they will continue to take a leading role in preparation for the conference in Brazil and in discussions in the United Nations, where some Governments seek to establish intergovernmental control. The multi-stakeholder approach, as opposed to the multilateral approach that is urged on us by some people, must be preserved.

The Snowden case has led some nations to question the US Government’s relationship with the internet, but let us remember that they have an enviable reputation in defending human rights and freedom of expression that many who seek to influence the internet governance

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debate do not. We must recognise that the environment has changed, however, and bear that in mind in preparing for the forthcoming discussions at the International Telecommunications Union in Brazil and in the UN General Assembly.

We must continue to support ICANN, and we must maintain the integrity of the system, including the all-important IANA function. Without careful and accountable management of those critical operations, we put at risk the integrity of the internet and its ability to evolve and expand. ICANN must develop internationally, and it can only do so if we assure the accountability of the organisation. An important part of that is to ensure active, multi-stakeholder engagement in shaping the future development of the organisation. The IGF, which is central to that, must also evolve. It is the only UN-mandated forum that brings together the experts who shape and develop the internet with the policy makers, Governments, legislators and regulators.

I am pleased that the Government are taking this role seriously. The Department for Culture, Media and Sport, the Foreign Office and the Ministry of Defence are all taking the matter very seriously, because although some people may consider it to be a technical subject, it is relevant to us all.

11.12 am

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey): It is a pleasure to serve under your chairmanship this morning, Dr McCrea. I thank my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) for calling this important debate. He said that it was a vital issue, but apparently it is not one on which our colleagues feel well briefed. As I gazed round the room and realised that we were alone, until my hon. Friend the Member for Montgomeryshire (Glyn Davies)—the one colleague who is interested in the subject—joined us, I thought that that spoke volumes about parliamentary participation. As we constantly tell our constituents, however, our physical absence does not necessarily indicate that we are not interested in an issue.

My hon. Friend the Member for Vale of Glamorgan has brought this matter to the attention of the House with his absolutely superb speech. I am sure that what I am about to say will come out the wrong way, but I could not have given a better speech myself. He articulated all the key issues that surround the slightly esoteric question of internet governance, and he illustrated why it is a vital issue for politicians in this country and across the globe who value a free and open internet and who recognise the astonishing benefits that the internet has brought.

I always begin such speeches by discussing the remarkable benefits that the internet has brought, and it is a cliché and a truism to say that over the past 20 years, it has begun to completely transform the way in which we do business and communicate. It has brought the globe closer together. It will drive economic growth, not only in this country—one of the most tech-savvy and internet-engaged nations in the world; the British consumer adapts well to new technology and e-commerce is a significant part of our retail landscape—but, perhaps more importantly, in the developed world. We all know

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how Africa has been able to leapfrog the fixed infrastructure found in developed countries on to a mobile infrastructure, which has enabled rural businesses in Africa in particular to trade and fundamentally remodel the way in which they do business. Such rapid innovation makes a massive difference to the developing world. Our message about a free and open internet, which is often misinterpreted as being a self-interested message on behalf of the west, is actually a message to the world about how the current model for internet governance secures the innovation that is transforming lives across the world.

As a result of that model, the internet is open, global and borderless; its technical standards are open and developed by consensus; and it is open to new devices, applications and services. There is no centralised or overarching global framework of top- down intergovernmental control or oversight. The key stakeholders that have made the internet such a success continue to have a voice: businesses, civil society, the technical community and the academic institutions where the internet was born. Governments can work with those stakeholders to share knowledge, experience, skills and best practice. Governments alone would not have the expertise that other stakeholders can provide.

My hon. Friend referred to the United Nations world summit on the information society that was held in 2005, which affirmed the multi-stakeholder model as the best way forward. That model, which is based on collaboration, consensus and partnership-building, ensures that the internet continues to be dynamic, innovative and robust. He rightly highlighted the continuing challenges to the model, and the challenges faced by those of us who believe in a free and open internet. The protection of children online, for example, is a massively important issue.

Glyn Davies (Montgomeryshire) (Con): That is an important issue in my constituency. I hope the Minister agrees that although we need an open and dynamic internet, the Government must be aware of the areas in which there is a real danger and do what they can—within reasonable powers and without damaging the internet—to exercise control and protect children from content that is extremely damaging.

Mr Vaizey: My hon. Friend is completely correct. The rule of law applies to the internet, and that which is illegal in the physical world is illegal in the online world. That is why a zero-tolerance policy towards child abuse images does not pose a threat to internet freedom. Those images are vile and illegal, and we must do everything in our power to remove them from the internet and catch those who exchange them. That is why we have worked with internet service providers to give parents the tools they need to protect their children online, and we will continue to apply the law on pornography online as well as offline. There are other issues: consumer protection, intellectual property rights, data protection, legal and regulatory frameworks and business models have had to adapt. They are all factors in our approach to internet policies.

There are challenges and opportunities, such as the need to promote greater multilingualism on the internet, so that more people around the world can access it in their own language. As I said, we need to support the developing world in expanding its capacity and internet

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infrastructure. That is why I am delighted that the Department for International Development, for example, supports the Alliance for an Affordable Internet in that area. The key point, which our approach to child protection highlights, is that no one stakeholder or Government acting alone can tackle the issues. Everyone needs to work together and collaborate, which emphasises why we are supportive of the multi-stakeholder model.

As my hon. Friend the Member for Vale of Glamorgan pointed out, there have been calls from some countries for a fundamental change in the international internet governance model. Some have called for Governments to have direct oversight of the internet and for a new intergovernmental organisation to create treaty-based rules. That sounds perfectly sensible at first blush—a superficially easy solution to some of the difficult challenges that we face with the internet and internet governance. Our strong view is that that top-down model would not work and would put the internet at risk for three reasons.

First, such formal institutional decision-making models would not be able to keep pace with the rapid technological change that is characteristic of the internet and the rapidly evolving needs and desires of internet users. Such a model would act as a brake on innovation and stifle the dynamism that has allowed the internet to deliver many benefits and opportunities for economic growth and social welfare. Secondly, the internet is an adaptive technology. It is not a single entity but a network of networks with no centralised control. It is questionable from a technical point of view how top-down control of the internet by Governments would work. Finally, as I said in my opening remarks, the internet is a tool that affects nearly all aspects of life. Any new intergovernmental organisation would at best duplicate the mandates of existing international organisations and at worst lead to significant confusion.

The World Trade Organisation, the World Intellectual Property Organisation, Interpol and many other international organisations have over recent years expanded their capacity to deal with internet-related issues in their areas of expertise. That seems to be a sensible way forward. We do not support the establishment of a new intergovernmental body, but that does not mean to say that we should resist all change. The international internet governance model needs to be kept fit for purpose, and as the internet develops, we must ensure that the existing processes we support can adapt to keep pace with future opportunities. Work is already under way in that respect.

My hon. Friend mentioned the IGF. I attended the past three forums. I missed the first one when I was a Minister, but I have been to every one since. The most recent took place last month. This debate is an opportunity for me to pay tribute to a number of players. The previous Labour Minister with responsibility for telecoms, Alun Michael, now a police and crime commissioner, helped to establish the IGF after the world summit on the information society. I pay tribute to him as a former Minister who maintained his interest and expertise in the area. He kept the issue alive in Parliament as well as supporting the creation of the UK-IGF. I echo the praise that my hon. Friend lavished on Nominet, the charity responsible for UK domain names, ably led by Lesley Cowley. It does a fantastic job in showing that the multi-stakeholder model is effective and that a

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private not-for-profit organisation can play a key role and respond to pressures and challenges sensibly. I pay tribute to the charity and its leadership.

May I also pay tribute to my hon. Friend? Since the departure of Alun Michael, he has stepped up, as it were, to become Mr Internet Governance in Parliament. He does a superb job chairing the UK-IGF parliamentary meeting and takes a keen interest in all the issues. As his remarks show, he displays a deep understanding, which is incredibly valuable to my work and the work of other Ministers.

The IGF plays a valuable role in bringing together a broad range of stakeholders to discuss issues of common concern and, having attended the past three forums, I know that it is effective. It has taken steps, which we support, to improve its effectiveness. The UN Commission on Science and Technology for Development has established a working group to look at how enhanced co-operation with Governments works and whether changes or adaptations are needed. We look forward to seeing the results of that work next year. My hon. Friend also mentioned ICANN, which has taken steps to internationalise its presence, under the new and able leadership of Fadi Chehadé, and open up the domain name system. We encourage it to continue that process. In 2015, the United Nations will conduct a 10-year review of the actions that came out of the world summit on the information society. We hope that that work will feed into the development of the millennium development goals. We continue to support such international processes.

My hon. Friend also mentioned the Brazilian summit. The Brazilian Government are proposing further international discussions on internet governance in April or May next year. Brazil has played a positive and valuable role in internet governance for many years. The Brazilian internet steering committee has published a set of principles for the governance and use of the internet. Those principles have been a helpful contribution to the debate, which many countries, including the UK, broadly support. We look forward to hearing more details about any event in Brazil next year and we stand ready to engage in that important process.

As I have said, perhaps repeatedly, we are sceptical about greater control of the internet by Governments or by an intergovernmental organisation. We are committed to engaging in discussions about how we can ensure that the current model remains fit for purpose. The tests we should apply to any proposed change to the internet governance model must ultimately be practical. Does it allow us to maintain the internet as an open, robust and technically secure service? Does it help us to find sustainable and consensus-based solutions to the challenges that we face? Does it allow the internet to continue to develop and innovate and offer social and economic benefits to more people around the world? The internet has been a huge success and continues to transform all aspects of our lives. We must work to maintain and strengthen the multi-stakeholder model of internet governance that has sustained that success and ensure that it is fit for purpose in the future.

11.27 am

Sitting suspended.

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Cost of Child Care

[Mr Jim Hood in the Chair]

2.30 pm

Bridget Phillipson (Houghton and Sunderland South) (Lab): It is a pleasure to serve under your chairmanship, Mr Hood. I am grateful for this opportunity to lead this afternoon’s debate on the cost of child care—a growing concern to many Members across the House. Perhaps I should start by declaring an interest as the proud mother of a little girl. Like many Members, I have come to realise how difficult it can be for families to find the right kind of child care place. I am in the fortunate position of not having to make the same kinds of financial decision about what works for my family. I am very lucky, but I am conscious that many people face difficult situations.

Once again, it is the Labour party that is highlighting the cost of living crisis. We are all too familiar with the challenges that our constituents find in accessing affordable child care and the increasing burden that they face. The failure to keep down the cost of child care has put immense pressure on household budgets and directly contributed to the cost of living crisis facing so many families across our communities. That failure applies equally to pre-school provision and provision for school-age children.

By 2015, families with children will have lost up to £7 billion a year of support. Right now, families with pre-school children face a triple blow of spiralling child care costs, a reduction in nursery places and a cut in financial assistance. Some of those families are losing up to £1,500 a year due to tax credits changes.

Parents often say that child care can really become a logistical nightmare once children reach school age. Despite that, the previous Labour Government’s programme to support school-age children has been abandoned by the Department for Education, leaving many parents struggling to juggle work and family life. The Minister will no doubt claim that the Government are making progress; unfortunately, however, creative number crunching cannot hide the fact that the Government’s plans are failing to support the majority of families. It has been left to Labour to respond to the current crisis, with our proposals to extend child care for working parents of three and four-year-olds and to introduce a legal guarantee for primary schools to make child care available from 8 am to 6 pm.

The previous Labour Government understood the importance of the issue. The 1998 national child care strategy recognised for the first time that child care was not just a private family matter, but one where Government had a role to play in ensuring the affordability, availability and accessibility of high-quality child care places. Much was achieved during those 13 years of Labour Governments.

Dr Thérèse Coffey (Suffolk Coastal) (Con): I should say to the hon. Lady and other Labour Members that the number of child minders fell significantly during their party’s time in office. It will be interesting to hear more about availability.

Bridget Phillipson: I am grateful to the hon. Lady, for whom I have a lot of respect. She takes a keen interest in these matters and wants to make sure that families have

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real choice among the options available when finding child care places for their children. I will make the very point put to her during yesterday’s debate: we need to make sure that child minders are of the right quality and can provide the best possible care for children. Unfortunately, some child minders, who are no longer registered, were not able to make that leap forward in providing the best possible high-quality care that we all want for the youngest children in our society.

The early-years entitlement was pioneered for four-year-olds in 1998 and it was extended to three-year-olds in 2004. Labour introduced the extended schools programme to help meet the needs of children, families and the wider community. Labour created Sure Start children’s centres and established more than 3,500 of them across the country.

Before the last general election, I was, like many others, relieved to hear the current Prime Minister acknowledge that Labour was right to prioritise child care support for families and pledge to protect Sure Start. However, like so many people, I have been bitterly disappointed that more than 500 Sure Start centres have closed since 2010 and that more than half of those still open are no longer providing on-site child care. All we heard today from the Prime Minister was a confirmation of that.

Chloe Smith (Norwich North) (Con): Is the hon. Lady familiar with the situation in Norfolk—a fine county that is home to my constituency and that of the Minister? Its current Labour administration refuses to give any protection to libraries in carrying out the cuts that it now has to make. Does she share my concern that libraries are also used by many families with young children, who need those services? The Conservatives did protect those libraries when they were in a position to do so.

Bridget Phillipson: Perhaps the hon. Lady could have a chat with a colleague at the Department for Communities and Local Government about the disproportionate cuts passed on to local councils. My local council is facing some of the biggest cuts in the country, having been given a disproportionate and unfair burden. Councils are being forced to take really difficult decisions about the kinds of services that they can provide.

I value the important role that libraries play in our community, just as I value Sure Start children’s centres. However, councils face impossible demands and are really struggling to balance the books. I suggest that the hon. Lady continues to lobby for her constituents, but it is her Government who are passing on those significant cuts—

Ben Gummer (Ipswich) (Con): There were no cuts in Suffolk.

Mr Jim Hood (in the Chair): Order. I ask the Parliamentary Private Secretary not to interrupt speakers.

Bridget Phillipson: A significant body of evidence shows that pre-school years are critical to a child’s development. Despite that, pre-school child care is becoming inaccessible to an increasing number of families. The cost of nursery places has risen by more than 30% since the last election—five times faster than the rise in wages

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over the equivalent period. It now costs, on average, £107 a week for a 25-hour nursery place. Parents working part time on average wages now have to work from Monday to Thursday before they have paid off their weekly child care costs.

To make matters worse, all this has happened while there have been 35,000 fewer child care places than in 2010. The fact is that for many parents, especially single parents, there is no longer a viable choice. With prices rising faster than wages, thousands of parents are being forced to stay at home to look after their children when they want the opportunity to work.

Kate Green (Stretford and Urmston) (Lab): Against that backdrop, is it not regrettable that, as part of their plans for universal credit, the Government intend to put the lowest-earning parents in the position of being helped with only 70% of their child care costs? Better-off parents, however, will receive help with 85% of such costs. Is that not perverse?

Bridget Phillipson: My hon. Friend makes an important point. She has consistently raised such concerns with Ministers and she continues to challenge the Government about them. Her point is of particular concern. We want to support the poorest families to access child care, but what she has mentioned will no doubt make that a lot harder.

The reality is that it is predominantly women who have been hardest hit by the rising cost of child care. Female unemployment is at its highest for a generation. According to the Office for National Statistics, more than 1 million women in the UK are out of work—an increase of 82,000 since May 2010. Affordable child care gives women the independence to make choices that are right for them and for their families. Every woman who is forced out of the workplace suffers a significant personal blow, while the rest of society loses her talent, knowledge and expertise.

As we heard in yesterday’s debate on this issue, the Government’s own social mobility and child poverty commission is clear that, for many low-income parents, cost, rather than quality, was the main factor in choosing child care. A recent survey by Asda showed that child care costs prevent 70% of stay-at-home mums from working.

I am sure that the Minister will agree that, in economic terms, it is absurd to lose the valuable contribution of women in the workplace. Higher unemployment rates increase the benefits bill and reduce tax revenues, while higher rates of women’s employment support stronger economic growth.

If the economic recovery is to harness everyone’s potential, the Government should ensure that work pays for all families. That is why Labour is proposing targeted measures to bring down child care costs. Our plan has two major components. First, child care for three and four-year-olds will be extended from 15 to 25 hours per week for working parents. That support will be made available both to single-parent working households and two-parent households where both parents work. Those plans will be fully funded through the bank levy.

In the last financial year, the banks paid a staggering £2.7 billion less in overall tax than they did in 2010,

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while over the last two years the Government’s bank levy has raised £1.6 billion less than they said it would. I hope the Minister agrees that, at a time when resources are tight and families are under pressure, that cannot be right.

The second component of Labour’s plan will be a focus on the primary school guarantee. Some 62% of parents with children of school age say that they want to be able to combine working and family life. For that to happen, they need to be able to access care before the school day begins, after it ends and during holiday periods. Nearly 30% of those who need such care were unable to find it. That is unacceptable.

Research from the Minister’s own Department backs that up. In September 2011, the Department published research highlighting that extended services provision can have an important positive impact on children, families, communities and schools themselves. Under the previous Government, 99% of schools provided access to breakfast clubs and after-school clubs, but more than a third of local authorities have reported that that has been scaled back in their area in the past three years. That is why Labour will legislate to guarantee that parents can access child care from 8 am to 6 pm if they choose.

Tackling the cost of child care is only one part of the solution. We must also consider how we can improve its availability and accessibility. Evidence shows that families from lower-income backgrounds, including in parts of my constituency, are among the least likely to use formal child care. We need to help our constituents understand the support that is available and how they can access it, along with the benefits that can come from having a child in nursery or child care provision. Furthermore, many parents in my local area work shifts, so child care services must become much more flexible to meet their needs and the circumstances of their employment.

The location of child care services is another important consideration. For many people in my constituency, transport is a major problem, owing to a lack of train services and a limited and expensive bus network, and I have been campaigning to change that.

We need a joined-up approach to child care. We need health visitors working with housing and child care providers, and councils working with the Government. Of course, families will always have the freedom to make arrangements that best suit their circumstances, preferences and needs, but the Government’s role is to ensure that every effort is made to provide support that is affordable and available when needed and accessible where needed.

Labour is the only party listening to parents and acting on their concerns. Child care is as important to the future of this country as investment in infrastructure. High-quality child care is key to tackling child poverty and improving social mobility. Labour has a clear plan for delivering that. It is the right thing for families, and it is the best thing for our country.

2.42 pm

Dr Thérèse Coffey (Suffolk Coastal) (Con): It is a pleasure to contribute to the debate. I congratulate the hon. Member for Sunderland upon Tyne South—

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Bridget Phillipson: Houghton and Sunderland South.

Dr Coffey: I got that wrong—I apologise to the hon. Member for Houghton and Sunderland South (Bridget Phillipson), whom I congratulate on securing this debate. I appreciate that we had a debate yesterday on a similar topic, and I welcome this opportunity to contribute again on this important matter.

I thought that, rather than just reading out my entire transcript from yesterday’s Hansard, I would spend a bit more time saying a little more on the issue. The aspirations set out by the hon. Lady—affordability, availability and accessibility—are critical. As she said in the answer that she kindly provided me, the reason why so many child minders fell out of the system in the 13 years of Labour Governments was quality. She is absolutely right; we need to ensure that high quality—in fact, world-class quality—child care is widely available.

That is why I support what the Government are doing to try to raise the quality of child care. The issue is also about improving our young children’s access to education. As has been pointed out by many on both sides of the House, it is key that we do our best with our youngsters to ensure that they are able to access the opportunities available to everyone. That is also an important part of social mobility.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): The figures on child minders have been cited on a number of occasions. Does the hon. Lady accept, as the Minister did yesterday, that the figures have declined in the three years under this Government? There are 2,423 fewer child minders in the system now than in 2010.

Dr Coffey: I understand that, but having 2,400 fewer since 2010 is a little different from having 53,000 fewer in 13 years. I am not going to go over again the ground that we have already discussed.

It is fair to say that there are an extra 800,000 nursery places through schools.

Catherine McKinnell: Is the hon. Lady suggesting that those additional places were created in the past three years?

Dr Coffey: My understanding is that the provision has grown in that time. I am sure that the hon. Lady will correct me if she thinks I am wrong. I meant “grown”, not “groan”, unlike the joke yesterday.

Returning to affordability, there is no doubt that the cost of child care has risen significantly. Some of that will have been due to supply and demand; there is no question about that, where demand exceeds supply. It is important to expand the number of child minders to help with that.

One of the things that the Government are doing right is allowing schools to shed some of the regulatory burden on the ability to provide a wider range of child care opportunities on site. Labour suggests that legislation is required to have a primary school guarantee, but I do not believe that. What is important is that a school should not have to register separately with Ofsted if it offers provision for under-four-year-olds or that it should not need such tight planning when it wishes to expand. The same should apply when existing nurseries of good and outstanding quality wish to expand.

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We are changing things so that Ofsted-registered and good or outstanding nurseries will start to receive funding directly, cutting out the recycling of money through the local council. That is another good measure to accelerate the needed provision of high quality child care.

Another good thing—the Minister may talk at more length about some of these—would be to streamline qualifications for early years, instead of having a choice of about 400 potential qualifications. In that way, parents could readily and easily check the quality rather than have to do their own research. Having an accreditation with fewer qualifications is a streamlining simplification that will help not only providers of child care but parents to make an appropriate assessment of what the right thing is.

On the cost of child care, I think the Government accept that having some of the most expensive child care in Europe—we are second highest behind Switzerland —is not sustainable. We need to address that. Coming from a Conservative tradition, I would try to do that not just by constantly upping the subsidy, but by providing wider choice, which will bring down cost. However, I commend the tax-free child care scheme, which will be available to working families.

I am sure that Government Members would be delighted if we could persuade the Chancellor to bring that scheme forward by a year, but I accept the fiscal constraints under which the Government operate. In any case, I am pleased that the scheme will be forthcoming in April 2015. That is a real positive for working mothers and fathers.

Other useful measures that the Government are introducing include shared parental leave. I understand that our coalition partners are keen to extend that even further; that is a debate for another time. I am pleased that we are pressing forward with that important development, and I am sure that Opposition Members welcome it too.

The reason why I do not think we need legislation to implement the primary school guarantee is that we can just get on with the scheme if that is what primary schools wish to do. We may require a statutory duty to force that to happen, and we have to consider that, but I see leading schools providing it already.

One point that I made yesterday is key. Governing bodies should work with head teachers and parents to ensure that the school day is not artificially reduced simply to have as short a lunch time as legally possible, but to ensure that time spent at school is available for extra-curricular activities and to be mindful of the fact that parents are working.

On Sure Start, we can have the back-and-forth. I have not had time since yesterday’s debate to go into the full detail, constituency by constituency, on the back-and-forth about whether 500 or just 45 have closed. As I said yesterday, I am happy to rely on the Minister’s assurance.

We are talking about choices. Yesterday, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell)—I got that constituency right—talked about the level of cuts, an issue referred to today by the hon. Member for Houghton and Sunderland South. I have looked briefly at the website of the Department for Communities and Local Government. Using the spending power formula, which the Local Government Association recommended to the Government, I am able to say that

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spending in Newcastle upon Tyne has gone down by 1.4% this year; in Sunderland by 1.5%; and in Middlesbrough —I see that the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is present—by 0.5%. I did not have time to look at Wolverhampton.

Those figures come from the spreadsheet that I have opened. Meanwhile, spending has decreased in Norfolk by 1.6% and in Suffolk by 2.1%. In spite of that, Suffolk county council is keeping open its Sure Start centres. Yes, the management of some centres has been merged. The two in Felixstowe are run by one lady, the magnificent Jennifer Clarke-Pearson, who is working hard with families in Felixstowe to make that happen.

As I reiterated yesterday, it is important that in this wider debate about public services, which my hon. Friend the Member for Norwich North (Chloe Smith) mentioned, we must ensure that front-line services are protected—as constituency champions, all hon. Members in this Chamber will continue to do that. However, we should not get hung up solely on bricks and mortar. We must focus on the outcomes.

Kate Green: I agree that we should not just focus on bricks and mortar. However, although centres in my local authority in Trafford are being merged, as the hon. Lady described, the availability of services has been significantly reduced. A number of programmes that were appreciated by families, some of which were available universally in the past, are now not available.

Dr Thérèse Coffey: I am genuinely sorry to hear that; I am not being flippant. It is important that local councils continue to provide valuable services that are doing good for local families, but, again, sometimes the Whitehall solution does not always work in the constituency or council area. The Department for Education issued statutory guidance in April to try to encourage councils and children’s centres to refocus—not on universality, perhaps, but on the families that Sure Start was originally set up to help.

Catherine McKinnell indicated dissent.

Dr Coffey: That is my understanding, although the hon. Lady shakes her head.

I praise the valuable work of Home-Start, locally—certainly in Suffolk. It is going into the homes of people that Sure Start is not attracting into its centres. If Sure Start is stage two for these families and parents, that is to be welcomed. Sure Start should be focusing on the needs of more vulnerable families and less wealthy families, rather than being a universal thing, when other providers can provide child care. We have heard that Sure Start centres provide only 1% of child care opportunities.

Catherine McKinnell: I am not sure which year the figures the hon. Lady cited relate to; I suspect it is the financial year 2013-14. The point that I was making yesterday—she mentioned the speech I made yesterday—is that councils have to look two, three or four years ahead, to work out how to manage their finances. The cuts that we are talking about have not yet come.

Dr Coffey: I accept that point. The hon. Lady is accurate in saying that I was referring to 2013-14.

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More widely, I appreciate councils’ concerns. Our own councils are going through this challenge; it is not unique to councils in the north-east, Trafford or wherever else. It is happening across the country. However, we need to be mindful that reducing support to local councils is being made up for, in some part, by other opportunities for councils to raise money. That may not be popular; it is certainly not popular with one of my constituents, who complained that they were going to have to start paying council tax on a house that had lain empty for three years. Such policies are not always popular, but they are revenue opportunities, as is business rates retention, which I am sure the hon. Lady supports. That is to encourage new start-up companies in areas such as hers and to attract companies’ inward investment, through relocation to the north-east, for example.

I shall bring my remarks to a conclusion, because I appreciate that many hon. Members want to participate. All parties are united on affordability, availability, accessibility and quality, which the hon. Member for Houghton and Sunderland South mentioned accurately at the start, although we have different ways of achieving those things. But all our reforms are working and I hope that they will continue to blossom. I look forward to the Minister’s explaining in further detail why we in the Government are leading the child care revolution.

2.54 pm

Mr Pat McFadden (Wolverhampton South East) (Lab): It is a pleasure to serve under your chairmanship today, Mr Hood.

Like my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson), I declare an interest. I have a four-year-old and a two-year-old. One is still going through the nursery system and one has recently done so. As well as declaring my interest, I also confess that before I had children I did not appreciate the importance of this issue to families or the costs or choices that people were forced into when trying to organise and pay for child care.

Before talking about costs, I want say something about the benefits. A good-quality nursery education can be hugely beneficial for young children. It can contribute enormously to their social confidence; it gives them their first friendships outside the immediate family; it helps them to learn the basic building blocks—colours, shapes and numbers—and it improves their speech. It is hugely beneficial. It enables them to be more confident, outgoing children. That is important, because we should all agree that we want children to get a good start in life. We know that it is in the early years, and the early months, of a child’s life that the first inequality often sets in. Good-quality early years care can be important in improving life chances and extending opportunity.

In a recent speech, the chair of Ofsted said that some children begin school 18 to 19 months behind in their development, compared with other children. Any society that cares about equality of opportunity or life chances should be concerned by that stark statistic. This is about cost, but it is also about quality and opportunity.

We cannot have a situation where some are effectively able to pull up the drawbridge on children who do not get good life chances, and allow these patterns of inequality to remain unaddressed. I do not seek to blame the

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present Government for that pattern. Inequality of opportunity is deep-seated and has existed for a long time. However, as my hon. Friend said, things are getting harder, with the closure of Sure Start centres and rising costs.

Let me turn to the costs and the choice faced by working families. We now have decent maternity provision in the UK. We used to be pretty much at the bottom of the European league. We are not at the top of the league, but we are in a respectable mid-table position. Mothers are entitled to 52 weeks leave, of which they will be paid for 39 weeks, although only the first six weeks is to be paid at the high rate of 90% of their salary. After that, mothers are dependent on contractual provision, which varies among employers. Fathers are now entitled to paternity leave for the first time, which is a welcome change introduced by the Government of whom I was a member. Before that, there was no recognition at all in the system of the role that dads might play around the time of birth or of the degree of support that they could offer to new mums.

The costs of child care really kick in when maternity leave comes to an end and mums want to go back to work. In London, a full-time nursery place can easily cost £1,300 to £1,400 a month. Let us pause and think about that. That is £15,000 a year, cash up front. There is a little bit of tax relief for this, but it is essentially cash up front. If people have two children in nursery, which is not uncommon, the cost may fall a little as the child turns two and three and the 15 free hours kick in, but a family could easily be looking at a cash figure of £25,000 a year for two children in nursery. That means that someone with two children would have to earn some £40,000, well above the national full-time average salary, just to pay for child care.

Outside London, the costs are lower, but still expensive. In my Wolverhampton constituency, a full-time nursery place costs about £600 to £700 a month or around £8,000 a year. It has to be remembered that that is £8,000 a year in a constituency where full-time average salaries are just over £20,000 a year. Even though child care is cheaper outside the capital, it is still a huge proportion of a full-time salary. No wonder that mums, particularly mums with two or more young children, are quickly forced into a choice between working and looking after the children. It is sometimes dads, but mostly it is mums who are taking longer parental leave and making that choice.

Some parents may want, and are able to afford, to stay at home, which is their choice, but most families need two salaries to survive. Facing such costs, mothers end up either working for very little—often because they fear that years out of the labour market will make it difficult for them to go back and that they will lose all sorts of opportunities—or being forced to give up their job simply because they cannot afford the child care. That is a huge waste of talent and experience. If capable people who are willing to work cannot do so because the costs of child care prove an insurmountable barrier, we have to care and do something about it because the country is losing out by forcing women into that choice.

This has gone on for far too long. I expect the Minister will stand up at the end of our debate and extol the importance of the 15-hour offer for three and

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four-year-olds and tell us how it has been extended to some two-year-olds. The offer was introduced by the previous Labour Government, and it makes a really big difference by giving important help to parents. Even I, as a member of that Government, do not pretend that the offer is the whole answer. The offer is often made in five chunks of three hours, which does not allow someone in a part-time job to rely solely on that child care; they still have to top up with other paid-for hours. What we need is child care built around the working day, which would be most valuable for working parents. The 15-hour offer is valuable and important, but I do not pretend that it is the full answer.

I am often struck by the comparison between how we fund early years and how we fund higher education. The time spent by children in nursery and by students doing a degree is pretty similar—typically three years in both cases. The costs are now similar. A full-time nursery place in Wolverhampton costs £8,000, and studying at university costs a similar amount. The difference is that the further south someone goes, even if they study at one of the best universities in the country, the cost of a nursery place becomes higher than the cost of a student place. For higher education students, there is a system of subsidised loans, with repayment terms contingent on earnings and forgiveness of the debt after a number of years if they do not earn enough. No such help exists for working parents, who are paying similar, and in some cases higher, costs. Working parents are expected to meet all those costs up front. They get almost no help other than a little bit of tax relief at the margins, which has a hugely damaging effect on the labour market and our economy.

There is an urgent need for more affordable places and for the same amount of national policy attention and energy to go into child care as has gone into higher education over the years. The truth is that child care has not received such attention and energy. When the costs of higher education go up, we often see students marching on the street. I confess that, when I was a student, I marched on the street for various causes. If the parents of one, two and three-year-olds were not so busy looking after their children and having to cope with the choices that we are talking about today, they would be marching on the street too.

Parents need our help. They need the same amount of policy attention as has gone into the costs at another point in young people’s lives. That is the priority that we should give to child care. Children need a good start in life, and parents need help. It is time that we made that a much higher priority.

3.4 pm

Chloe Smith (Norwich North) (Con): It is a pleasure to follow the right hon. Member for Wolverhampton South East (Mr McFadden), whose surname I have just acquired, with an extra z, from his fellow Scot, my husband.

Parents in Norwich North are taxpayers, too, and in this debate we must think about what they are paying. I am delighted that the Government I support have taken many of the lowest-earning parents out of income tax altogether, which is a good thing, but we ought to approach the debate honestly. Those young parents, who, as the right hon. Gentleman rightly said, are very

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busy, do not necessarily have time in between looking after their youngsters to take an extremely close interest in the goings on of this Chamber, but they should not be paid the disrespect of our talking dishonestly about the size of the pot and who pays for it.

Like my hon. Friend the Member for Suffolk Coastal (Dr Coffey), I am grateful to the hon. Member for Houghton and Sunderland South (Bridget Phillipson) for calling this debate, which gives us an opportunity to talk about these important issues. The hon. Lady might not be surprised if I begin by saying that, if she knew how hard it was going to be to reduce the deficit, she might have thought twice about her support for her party’s running up of the deficit in the first place. I know of no woman or man, no mother or father—indeed, no rational person—who would desire to leave debt to their children without having had the courage to address it themselves. It ought to be commonplace in this debate to say that addressing the deficit now ensures that future generations are not burdened with unsustainable debt, higher taxes or diminished public services. Of course, I will address the public service aspect today.

Among the many claims and counterclaims that have been made in recent weeks, the salient point, with respect to the taxpayers who have to trust us to do such things for them, is that the Leader of the Opposition has pledged to extend free child care for three and four-year-olds, but he is trying to pay for it using a concept of money that he has already used more than 10 times. It is just not good enough to face young parents with such false accounting, and I am confident that the Minister agrees. It is not good enough to say, “Yes, we’ll borrow more to fund it,” because that borrowing only comes back on the children who we might otherwise be trying to help.

I am pleased that the introduction of tax-free child care that the Minister has so passionately advocated will mean that parents get £1,200 towards each child’s child care costs in addition to both our extension of the hours of free child care and our cutting red tape for schools, so that they can offer more affordable care after school and in the holidays. Those are practical and affordable actions, and we must have this debate in that context. We have to take decisive action for the reasons that we have all tried to set out, but we have to do that by addressing the cost and quality of child care and by having respect for those who entrust us with the job of honest politics.

It is essential that the Government maximise the contribution that women can make to the economy, not because of political correctness but because it is an economic reality. Growth will get this country back to where it ought to be after Labour left it lying in a ditch. Such growth will come about only if we have women in the workplace doing their best for themselves and their family and gaining satisfaction from the careers that we would all like to see. We must remove barriers to the workplace, which is why I am here today to add my voice to the support for what the Government are doing to promote child care policies that help women get back into the workplace.